The British pound licked its wounds today after difficult trading over the past few weeks.
The UK economic calendar is light with no numbers due for release until Thursday. This suggests that pound strength or weakness will be largely contingent about the market’s demand for risk as well as Eurozone and US economic data. Bank of England monetary policy member Bean left us some food for thought this morning when he said that the current level of inflation may necessitate tighter monetary policy. The market is currently pricing in 75bp of easing by the middle of next year. If we hear similar comments from the BoE again, then a repricing of expectations may be warranted.
[B]Written By kathy Lien, Chief Currency Strategist for DailyFx.com[/B]